Buying a home is less like a sprint and more like a marathon. If you’ve successfully made an offer on a home and chosen a mortgage, then you’ve almost reached the finish line for your goal of becoming a homeowner.
Closing is the last part of the homebuying process. It involves signing all the paperwork that transfers official ownership to you and legally binds you to paying your mortgage. A mistake or oversight here could frustrate you as long as you own the home, so it’s important to know this process doesn’t happen overnight, and may require patience.
Here’s a detailed guide to how long it takes to close on a home:
- How Long Does Closing On a House Take?
- House Closing Timeline: 9 Steps To Close On a House
- What To Expect at Closing
- What Can Cause Closing Delays?
- How Much Does It Cost To Close On a House?
- FAQ: Time To Close On a House
- The Bottom Line on Average Closing Times
How Long Does Closing On a House Take?
Generally, you can expect the house closing process to take between 30 and 60 days. As of September 2021, it takes an average of 49 days to close on a home, according to ICE Mortgage Technology.
Buying with cash vs. buying with a mortgage
Buying a home with cash can expedite the closing process because you won’t need a loan to fund the purchase. Cash sales can close in as little as a week or two.
House Closing Timeline: 9 Steps To Close On a House
There are a lot of steps to take when closing on a house, so let’s go through the most common components, along with how long each step can take.
1. Negotiate and sign the purchase agreement
How long it takes: At most, about 10 days to two weeks.
Closing cannot begin until both the buyer and seller sign a purchase agreement for the home. The purchase agreement describes the sale in detail, including the home price, conditions of the sale, and the closing date.
Unless the offer sets a deadline for signing the purchase agreement, there’s no hard-and-fast time frame for completing this step. Most offers set a deadline of about 10 to 14 days after the buyer accepts an offer, says Kimo Quance, a real estate agent and owner of The Kimo Quance Group in Santee, California.
Your purchase agreement may contain conditions that must be met to close the home sale. These are called contingencies, and the most common ones are:
- An appraisal contingency. This specifies that closing the sale is contingent on a satisfactory appraisal of the property’s fair market value. If the appraisal determines the home is worth less than the purchase price, then the buyer can renegotiate or back out of buying the house.
- A financing contingency. This makes closing contingent on the buyer securing financing to pay for the property. If the buyer fails to get a mortgage, then the sale is canceled.
- An inspection contingency. The offer is contingent on the buyer being satisfied with the results of a professional home inspection. If the inspection finds the home has problems that make it unsafe or are expensive to fix, then the buyer can back out of the sale or renegotiate terms with the seller.
2. Get approved for a mortgage
How long it takes: 30 to 60 days.
Even when the buyer is preapproved, their loan application still needs to be finalized and approved to get a mortgage. If you’re buying, it’s smart to shop around for a mortgage to make sure you’re getting the best available deal. Within three business days after you submit a full mortgage application, the lender will provide a loan estimate with the details of the loan you’re approved for. Then you have 10 business days to accept the terms of the estimate.
When you submit a final loan application, the lender may ask you to provide additional paperwork for mortgage underwriting, which is the process of verifying your financial information. Depending on the complexity of your situation, underwriting can take a few days or a few weeks. Providing the necessary documents to the lender ensures the process moves along as quickly as possible.
Once the lender approves your mortgage application and you accept its terms, a closing date for the sale will be scheduled.
3. Open an escrow account
How long it takes: Up to one week.
An escrow account is essentially a bank account managed by a third party — such as the title company — to hold all funds for the sale and ensure payment to the proper parties. Once the sale is completed, the escrow account is closed.
“The title (or) escrow company is mutually chosen between buyers and sellers, generally advised by their Realtors,” says Beth Benner, a real estate broker at Living Room Realty in Portland, Oregon.
4. Get a home inspection
How long it takes: Two to four hours.
Getting a home inspection is a crucial step that should be scheduled as soon as possible. The inspection will reveal any major safety or functional issues with the house so that you can better understand its condition before completing the sale. If the inspection reveals the need for expensive repairs, you can either renegotiate the deal with the seller or use an existing inspection contingency in your purchase agreement to cancel the sale.
If you fail to get a home inspection and you discover a serious problem after closing, then you’ll have to pay for repairs yourself.
5. Lock in your interest rate
How long it lasts: 15 to 60 days.
Since interest rates change, it can be a good idea to lock in your mortgage rate. Doing so gives you some protection from market fluctuations, especially if rates increase before you close. If you don’t close within the specified time frame, you’ll lose the rate lock, and your mortgage rate can change.
Keep in mind that interest rates also may go down. If you’re locked into your mortgage rate, you could miss out on a lower rate if overall interest rates decline.
6. Have the home appraised
How long it takes: Two days to one week.
Getting a home appraisal assures the lender that the mortgage it’s offering you is appropriate for the property’s market value. It’s a common contingency that must be met, and usually is required by the lender. The home appraisal is conducted by a licensed, third-party appraiser who has no connection to the buyer, seller, or lender.
7. Buy insurance
How long it takes: Up to a few days to get approved by the insurer.
You’ll likely face a couple of different insurance charges when closing on a home. There’s homeowners insurance, which provides liability coverage and protects you financially from damages to your property, as well as title insurance, which covers you and the lender against problems with the title or past claims on the home. In some parts of the country, you also may need or want separate flood or earthquake insurance policies.
8. Perform a final home walk-through
How long it takes: Up to a few hours.
One of the last things you should do before closing is to take a final walk-through to inspect the property and ensure it’s in the condition you expect. This allows you to check that the seller has completed any negotiated repairs and left behind any furnishings that were part of the sale. It also can alert you to any damage that may have occurred since the home inspection.
9. Get through closing day
How long it takes: Up to a couple of hours.
On closing day, the buyer and the seller sign the paperwork that officially transfers the ownership of the property. The buyer also closes on their loan. Money in the escrow account is paid out to the appropriate parties, and the buyer receives the deed and keys to their new home.
What To Expect at Closing
Let’s go through in detail what to expect on closing day, including the important documents you’ll be signing and the parties who will be present.
What happens on closing day?
The closing typically occurs at the office of one of the involved parties, such as the title company. Several things happen on closing day, but a big part is signing documents.
Key documents to review include:
- The closing disclosure. This document finalizes the details of your mortgage, such as the interest rate, monthly payment, cash to close, and more. You’ll receive this document at least three business days before closing.
- The deed of trust. This is the lender’s assurance that you will repay your loan, and allows the lender to foreclose on your home if you fail to meet the payment terms of your mortgage.
- The promissory note. This document dictates that you agree to repay the lender for the amount borrowed at the stated interest rate, and on the repayment schedule outlined.
“Once all docs have been executed by all parties, the closing agent can transfer all the monies, or, as we call it in the industry, ‘fund,’” says Jose Laya, a real estate broker at Berkshire Hathaway HomeServices EWM Realty in Miami Beach, Florida. “Funding is where the monies get transferred to all parties and the transaction officially is closed.”
Who is present during closing?
The closing may include all of these people or just some of them:
- The buyer’s real estate agent.
- The buyer’s attorney.
- The seller’s attorney.
- A representative from the title company.
- A representative from the escrow company.
- Someone representing the lender.
“You can actually have both parties, buyer and seller, at the closing, but I don’t recommend this,” says Shay Raja, a real estate attorney at Henderson, Franklin, Starnes & Holt, P.A., in. “Normally, on closing day, you want to have the seller’s docs already signed, so that the buyer can just come to closing and sign all docs, and also have the transaction fund.”
Digital vs. in-person closing
Holding your closing remotely via an online video conference can help you save time. This also can be a good option if you are buying a home remotely, far from where you currently live, and you know the paperwork and funds can be submitted electronically. Remote online notarization lets you complete this process from a distance, though the exact rules vary by state.
What do you need to bring to the closing?
It’s important to bring valid identification, such as a driver’s license or passport. You also should check with your bank and be ready to pay the closing costs.
“The title company will either require a wire (transfer) or a cashier’s check for the closing,” says Teresa Trigas-Pfefferle, a Realtor and broker at Keller Williams in Clinton, New Jersey. “It is also good to bring your own personal checkbook, in the case of any small changes.”
How long does closing day take?
Closing day should only take an hour or two. It could take longer if you are unprepared or fail to bring necessary documents with you. Once you’ve signed all the documents and paid your closing costs, the title to the home will be transferred to you.
What Can Cause Closing Delays?
There are several reasons closing may be delayed, such as:
- The seller hasn’t completed agreed-upon repairs.
- The buyer is unable to secure financing.
- The buyer is unable to make the down payment.
- There are issues with the title.
- There’s a discrepancy between the appraisal and sale price.
- There are unpaid liens on the property.
- There are issues with the buyer’s credit report or credit score.
“Typically, it’s the borrower not providing documentation in time, or the wrong documentation,” says Andy Kolodgie, owner of The House Guys, a real estate investment company in Washington, D.C. “Otherwise, the lender might be moving slowly, and things are not getting done in time, such as underwriting and processing. Sometimes, the title company will overbook their schedule and not allow for enough time to close.”
How to avoid closing delays
Here are some of the ways a buyer can avoid delays and keep the closing process on track:
- Get mortgage preapproval.
- Select a lender as early as possible.
- Gather necessary documentation in advance.
- Review all closing documents carefully.
- Ask your real estate agent if anything seems unclear or incorrect to you.
- Get a cashier’s check or wire transfer to cover the down payment and closing costs.
- Conduct a thorough final home walk-through.
How Much Does It Cost To Close On a House?
Closing costs, aka settlement fees, typically range between 2% and 5% of the purchase price, according to Freddie Mac. They cover the fees charged by the parties involved in the sale, including your real estate agent and the lender.
The loan estimate provided by the lender explains what you can expect to pay in closing costs, broken down item by item. It includes the total closing costs as well as the estimated cash to close, which also factors in your down payment, earnest money, and any other charges or credits.
Final closing costs will be detailed in the closing disclosure, which you will receive at least three days before closing day.
FAQ: Time To Close On a House
Here are answers to some frequently asked questions about closing on a home.
Closing quickly can help you save time and money. For one, it’s easier to close on your home as efficiently as possible. It also can help you lock in your interest rate, since your mortgage rate lock will have an expiration date. If your closing drags on and exceeds the rate lock term, then you’ll either need to pay to extend it or risk getting stuck with a higher interest rate.
Generally speaking, loans backed by the Federal Housing Administration take 30 to 60 days to close.
After you’ve signed the paperwork and submitted the funds, the title to the home will be transferred to your name. This is when you officially become the homeowner and receive the keys.
The Bottom Line on Average Closing Times
Closing on a house can be a stressful experience, but it also means you’re at the end of the homebuying process. Fortunately, many parts of the house closing process — such as setting up escrow accounts, preparing paperwork, and conducting the home inspection and appraisal — are handled by professionals.
What’s important for the buyer is to understand all the responsibilities, requirements, and transactions that take place in the homebuying process. Avoid signing any documents that you don’t understand or seem different from what you expected, and take as much time as you need to learn how to close on a house.
Rory Arnold contributed to the reporting for this article.
